Back in December, I took my first babysteps in the field of investing. A mere $200 in a Sharebuilder account. I think I want to do more. I can't do a whole lot, but I need to be making some of my money work harder for me. I have about $4500 sitting in my VirtualBank EMoneyMarket account, currently earning 2.57% APR. It's not bad, but it's not at the inflation rate either. The reason the money is there, is that it is my emergency fund. I need to to get a reliable return and still be easily accessible.
I'd like to do more with the Sharebuilder. Right now I send $25 a week toward to the eMM account, I'd like to send the same amount to Sharebuilder. It seems the safe thing is an Index Fund. The S&P 500, something along those lines. Would that nominal amount even do anything for me? Would I be better off taking that small amount and going for some stocks?
There are a lot of "beginners" websites out there for investing. They're still all over my head. You're supposed to "research" thoroughly any stock you invest in. How do you do this? Inquiring minds want to know simple answers. I haven't gone out and bought "Investing for complete Idiots" but I'm tempted.
What's the best resource for someone starting completely from scratch? No background. Just the facts, ma'am. Where do I turn to find a simple, easy guide for what I want to do, namely take $25 a week and put it somewhere where it generates more than the current inflation rate, so that I'm actually getting ahead a little bit?
Throw me a fricken' bone people. I'm the blogger...need the info...
Simply a journal of my personal finance transactions. I've been bad with money in the past, and am trying to cut down spending and make smart decisions with what I have. I recognize the need to simplify my life in many areas to make this possible. Thus the title of the blog. You can email me at the address to the right.
Email Me
Subscribe to the Site Feed
3 comments:
Bruce, If I were starting out today, I would first concentrate on getting a suitable asset allocation. My allocation, for example, looks like this.
For small amounts, I would go with index mutual funds from Vanguard. For larger amounts, I'd go with exchange traded funds. Check out http://www.techuncovered.com. Its a great resource.
Good luck!
Canadian Capitalist
I assume that if you are going to invest in stock, either directly or through a fund, you are looking at not needing the money for al least 5 years or more. Anything shorter and you probably shouldn't be in equities.
Anyway, even at $4.00 per trade, Sharebuilder would be a pretty expensive way to invest small amounts. Assume you wait for your $25 per week deposit to accumulate to $100 and then make a purchase. At $4 that is a whopping 4% loss right at the start - that is an unbelievably high investment cost.
Stick with a low cost index fund for now. With automatic deposits, they will waive the minimum deposit required. The recommendation for Vanguard's S&P 500 is great. It is a very low cost fund.
Good luck!
Bruce,
The best way to invest your money is to take your $100 a month and PayPal it to Nev@mail.utexas.edu
Ok, it may not be the BEST way to make you any money, but it would make ME happy :-)
I suggest you find a few companies you really like and start investing in them regularly. I first read "Beating the Street" by Peter Lynch to learn about investing.
Post a Comment